Oecotrophologie · Facility Management (OEF)
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Purpose. Organization renewal through innovation represents a difficult managerial challenge in family firms. Our research reveals a framework for sustaining innovation capabilities through a perspective of value and process principles.
Design/methodology/approach. We examined findings from consulting projects in high performing family firms and literature from the areas of family firm strategy and leadership.
Findings. We describe how combining patterns of innovative organizations with patterns of high-performing family firms can help leaders to sustain innovation. This study indicates that a value- and process-driven perspective is important for effective innovation. In particular, the four value principles are continuity-, community-, connection- and command-related factors (4C’s). The four process principles, in turn, are profession-, project-, product- and purchaser-related factors (4P’s).
Originality/value. This paper is part of a wider study of innovative German family firms initiated in 2012. Our 4C’s and 4P’s framework suggests a practical means to better implement innovation by reconciling the firm’s innovation strategy, leadership behavior
and organizational learning.
Purpose. Experience suggests that a loss of trust may occur on both sides of the merger and acquisition (M&A) equation – acquirer and acquiree – though the latter is more generally considered the most affected. The purpose of this paper is to explore how a loss of trust during the M&A process in family firms can be avoided. An acquisition potentially triggers a loss of trust in the workplace and, as a result, a loss of productivity thereby causing the merged business to totter. Moreover, trust in a firm’s owner tends to be a key driver in merging family firms.
Design/methodology/approach. The authors investigated an expanding German family firm that recently acquired other family firms. They conducted in-depth interviews on all hierarchical levels in both the acquiring and the acquired firm. These cases are taken from a wider study of acquiring family firms completed in 2019.
Findings. Value congruence, integrity and openness are found to enhance trust during M&As, in particular, if the new owner of a merged enterprise is also a family entrepreneur. Under certain circumstances, the trust of employees in the acquired firm’s previous owner can be transferred to the new owner.
Originality/value. This study explores how specific circumstances of family firms impacts organizational trust in M&A processes. The developed framework helps family firms to use characteristics of their specific nature as an asset to maintain their employees’ organizational trust before, during and even after M&As.
Purpose. Several studies of family firm failures have pointed to non-family members in leading positions as a reason. However, non-family members have often played a key role in family-firm longevity, while non-family executives’ involvement in family firms is increasing. These non-family executives who (co-)run family firms are thought to require an almost impossible set of behavioural qualities. The aim of this exploratory study is to find out how specific leader behaviours of effective family executives and non-family executives may differ.
Design/methodology/approach.
Based on Dulewicz and Higgs’ (2005) broad leadership frame, the authors draw attention to a large range of behaviours of family-firm executives. In-depth interviews were conducted with successful German executives, both family and non-family ones. Their answers had to contain specific behavioural examples.
Findings. More behavioural similarities than differences are shown between family- and non-family-based executives. Yet, the self-reflective communicative behavioural qualities of the non-family executives could balance a lack of such qualities among the family-based executives. Based on the three major differences – decision-making style, communication versatility and self-awareness – specific new research propositions are distilled about effective family firm leadership.
Originality/value. Practical suggestions for recruiting non-family executives are offered. Future quantitative longitudinal research on how to pair specific behavioural qualities of family and non-family based executives that optimise family-firm longevity is urgently needed.
Purpose.
Mergers & acquisitions (M&As) can be an effective way to expand into new markets or business opportunities. Yet, a considerable number of failed M&As can be attributed to disregarded human resource (HR) concerns. In particular, an organization’s leadership tends to hail the advantages of a merger or acquisition during the early stages, raising employees’ expectations (honeymoon effect). Many documented failures in such corporate transactions indicate organizational members’ declining satisfaction following a deal (hangover effect).
Design/methodology/approach. Drawing on in-depth interviews with senior M&A experts at a global big-four accountancy firm and focus group sessions with their respective clients, this study investigates in two cases the interplay between HR issues and M&A transactions and infers effective risk management actions.
Findings. A honeymoon hangover after a transaction may appear in organizations if HR issues are neglected. Study results provide notable implications for HR departments and HR professionals facing a merger or acquisition. These implications include (1) focusing on HR risks, (2) involving HR executives to manage the HR due diligence efforts, (3) setting up transition teams that communicate well, (4) creating policies for learning and knowledge sharing, (5) developing new competencies for the NewCo, (6) being sensitive to cultural differences and (7) considering legal aspects.
Originality/value. Although M&As have been much researched, relatively little has been written on practical managerial adaptation from a human resource perspective and its implications for organizational learning. This article helps address this imbalance by providing a people-oriented approach for effectively managing M&As from beginning to integration.
Research limitations/ implications. The two transactions studied revealed patterns that are important for successful change. However, we should not underestimate the individual perspective in M&As. Further studies with interview data directly from stakeholders are important to analyze further the relationships between HR due diligence, organizational learning, effective knowledge transfer, and culture. Due to our research approach, we cannot claim that the results can be generalizable to all major M&As. Further research is needed to measure the impact of the HR Due Diligence aspects outlined on M&A success.